Security Token News
Overstock Seeks to Tokenize Series 1 Shares – tZERO
The online retail giant, Overstock, issued a letter to stockholders this week requesting the ability to tokenize all Series 1 shares utilizing the company’s tZERO blockchain platform. tZERO is a subsidiary of Overstock that was developed specifically to handle blockchain services. Swapping to the blockchain system gives investors more flexibility. Also, it allows Overstock to showcase its new platform’s capabilities.
Enhanced Trading Experience
Citing the letter, Overstock officials seek to provide investors with more liquidity in the market. As the security token sector continues expanding, there is a growing call for more liquidity in the space. Security token exchanges provide regulated digital asset investors with an answer to the liquidity issue. These platforms allow investors to trade blockchain assets while remaining compliant. Compliance includes following KYC/AML laws. Also, security token exchanges register with government officials. In these ways, they differ from traditional crypto exchanges.
Speaking on the tZERO project, Overstock’s CEO Patrick Byrne praised the progress attained so far. The platform officially launched in January. Byrne described the tZERO blockchain platform as of the “most significant and cutting edge in the world.” He also took a second to relate his excitement surrounding the first round of products becoming publicly available.
Overstock CEO Patrick Byrne via Twitter
tZERO Exchange
tZERO is a leading Fintech firm that offers enterprise-level blockchain solutions for traditional markets. The platform enables streamlined security token trading with full compliance. Today, the company operates one of only a handful of licensed security token exchanges in the US.
As you could imagine, tZERO is considered a major player in the security token space. Notably, the platform has been on the crypto radar ever since the firm secured $134 million in funding during a December 2017 ICO. Since then, the company hosted numerous crowdfunding rounds aimed at select investors.
tZERO incorporates securities regulations directly into its token protocol. This strategy ensures that all security tokens remain compliant throughout their life cycle. Interestingly, the firm announced this month that moving forward, all tokens on the platform will utilize Securitizes Digital Securities (DS) protocol.
A Demonstration with Overstock
It appears that the developers behind the tZERO platform are ready to start trading. Also, it’s praiseworthy that the development team decided that tokenizing Overstock shares first was the best move. This strategy boosts confidence in the platform. Also, it enables tZERO to iron out any issues in-house.
Not All Roses
The tZERO platform has not been without its setbacks. In Q4 tZERO showed $12.6 million in pre-tax losses. Consequently, the program saw cutbacks in March that were significant. Despite the losses, tZERO is now active and ready for action.
tZERO Time
As the world of the corporate coins and security tokens is just heating up, tZERO picked an ideal time to enter the market. This platform should capture a significant amount of trading volume amongst these corporate coins as the market expands. For now, investors eagerly await to see the results of the last two years of development.
Failure to Launch
On a disappointing note, Blockport has announced the cancellation of their ongoing security token offering. After launching the event, roughly 1 month ago, the team has indicated that they have failed to attract their minimum threshold of investments.
This comes as a letdown to the industry, as Blockport represented one of the first security token offerings to be offered through the Tokeny platform. To date, only a handful of STOs have taken place through ANY issuance platform.
Future Aspirations
While Blockport will be returning investments to the few participants in their STO, they have indicated that this is not the end for them. Their intent is to scale back operations in the short term, reflect, and establish a path for future growth.
This means that the platform will be shutting down in the coming weeks, revering to a ‘development mode’.
Commentary
Blockport CEO, Sebastiaan Lichter, elaborated on the cancellation in a statement to the public. The following is what he had to say on the matter.
“In the past few months our team has worked extremely hard to launch the first round of our STO, and yesterday this ended after being open for almost one month…In short, the results of the fundraise are not sufficient to proceed with the issuance of BPS tokens.”
Despite this, Sebastiaan Lichter remained confident in the future of blockchain. He continued,
“We still see a lot of opportunities in this industry and have built a top performing trading platform that many people love to use and which has had almost zero downtime or issues since we launched it in the summer of 2018…Whilst developing our platform, our goal is to explore opportunities that support a restart of the Blockport platform in the future.”
BlockPort
Operating out of Amsterdam, Blockport is a Dutch company, which was launched in 2017. Under the watch of CEO, Sebastiaan Lichter, Blockport has developed and launched a trading platform, tailored toward, both, utility and security tokens.
The security token offering, discussed here today, was launched through the Tokeny issuance platform, on March 31st, 2019.
Tokeny
Tokeny is a Luxembourg based company, which was launched in 2017. Above all, Tokeny acts as an issuance platform, providing companies with solutions for the tokenization of assets. Tokeny was responsible for facilitating the Blockport STO – For their part, the event went off without a hitch.
In Other News
While the failed STO is an unfortunate situation, BlockPort is by no means alone. For a variety of reasons, there have been various deals to have fallen through in the past few months. The following articles detail a couple of these situations.
Harbor Cancels Convexity Properties STO
Due Diligence Process Delays tZERO Investment
BitBond Bounty
BitBond, a blockchain company hosting a FINRA approved STO, has recently announced the launch of a bounty program. This program was launched in an attempt to raise market awareness of their ongoing security token offering.
This STO, scheduled to be live until early June, has seen modest success thus far, with investors contributing over €2 million to date. This puts them well on their way to raising the minimum €3 million in the event.
In an attempt to ensure the minimum €3 million threshold is met in their STO, the bounty program consists of 6 main ways in which participants can be rewarded.
- Hunter Bounty
- Referrals leading to bounty program participation
- Affiliate Bounty
- 5% commission on referrals leading to investments over €10,000
- Signature Bounty
- Token compensation for active BitcoinTalk users which advertise the STO in their signature.
- Creative Bounty
- Rewards for creative advertising in the form of memes, gifs, images, etc.
- Social Media Bounty
- Compensation for STO promotion through qualified Twitter, Facebook, LinkedIn, and Telegram accounts
- Content Bounty
- Rewards for creation of articles, and videos, which raise awareness about the BitBond STO.
Bounty Programs
A bounty program is a promotional event, aimed towards raising awareness of a fundraiser. Participants in such programs are typically compensated for promoting a company with tokens. Promotional tasks are often varied, such as writing articles, attaining referrals, reporting bugs, and so on.
While bounty programs were commonplace throughout the ICO boom, the concept is new when being applied to security token offerings. Time will tell if this promotional tool is an effective one when dealing with this new form of fund raising.
Commentary
BitBond CEO, Radoslav Albrecht, commented to CrytoGlobe on the choice to host a bounty program. He stated the following.
“Since our launch in 2013 Bitbond has always worked closely with the crypto and blockchain community. This bounty program gives us the opportunity to engage further with our community, reward Bitbond early adopters and spread the news about our new groundbreaking project, the Bitbond STO.”
BitBond
BitBond is a Germany based company, which was launched in 2013. Above all, BitBond utilized blockchain to facilitate financial services. This primarily includes the issuance of business loans.
Company operations are overseen by Founder and CEO, Radoslav Albrecht.
We recently detailed BitBond and their FINRA approval – a feat not achieved by scores of applicants prior to BitBond. Check out the details to this success HERE.
In Other News
Beyond BitBond utilizing the Stellar blockchain for issuing security tokens, Stellar has experienced growing levels of adoption in recent months. The following articles demonstrate various ways in which this adoption has occurred.
Smartlands Releases Stellar Powered Wallet Supporting security Tokens
Stellar Chosen by Wevest for Security Token Offering Platform
Poloniex Delisting Assets
Poloniex has given unfortunate news to enthusiasts of various assets supported through their platform. The popular exchange has announced that, due to ongoing regulatory uncertainty, they will be de-listing a variety of assets.
This event is a precautionary one, as the possibility exists that the structuring of these assets would classify them as securities. Fearing retribution from the SEC, Poloniex has decided to play it safe, and remove their support.
Uncertainty Remains
While the portfolio of offered assets on Poloniex remains strong, this does not mean that other assets can rest easy.
It has been made known, by various industry participants, over the past few weeks that uncertainty remains pervasive in the digital securities space. This is largely, in part, due to a lack of clarity afforded by United States regulatory body, the Security and Exchange Commission.
Until the SEC is able to provide more detailed guidance on these digital assets, expect to see more de-listings, for fear of these being dubbed securities.
Down and Out
The affected assets in this announcement total 9, which each unique in their structuring and target markets. They are as follows,
- Augur (REP)
- Omni (OMNI)
- Decred (DCR)
- Game (GAME)
- Ardor (ARDR)
- Bytecoin (BCN)
- Gas (GAS)
- Lisk (LSK)
- Nxt (NXT)
Commentary
In a statement to the public, Poloniex explained their reasoning for the delisting of various assets. The Poloniex team broke the news, to holders of these tokens, by stating the following.
“We are committed to complying with regulatory requirements in every jurisdiction. Today’s action is a result of regulatory uncertainty in the US market. Specifically, it is not possible to be certain whether US regulators will consider these assets to be securities.”
Despite this, the team continued, expressing optimism moving forward.
“We understand how frustrating this choice is for our customers, and for the crypto community more broadly. We believe in the power and potential of these assets, and will continue to focus time and energy on supporting positive policy and regulatory developments for crypto assets in the US and around the world.”
Poloniex
Poloniex is a Delaware based cryptocurrency exchange, which was launched in 2014. In the time since their launch, Poloniex has gone on to establish themselves as a leading exchange. Poloniex’s reputation has been strengthened in the past year, since being acquired by Circle.
Circle
Circle is a Boston based company, which made waves in 2018, when their $400 million acquisition of Poloniex occurred. In the time since this move, Circle has worked to bring Poloniex in line with regulations, building a strong reputation, and growing the platform at the same time.
In Other News
While this is unfortunate news for enthusiasts of the affected assets, Poloniex doesn’t simply have a habit of delisting. In previous months, we have noted their addition of Polymath and their utility token for use through their security token’s tailored services.
Security Token Platform, Polymath (POLY), Listed on Growing Number of Exchanges